What a Custodial Account Is and How It Works

You cannot open a checking account in a one-year-old's name alone—banks require the account holder to be at least 18. Instead, a parent or legal guardian opens a custodial account, which is held in the child's name but controlled by an adult until the child reaches the age of majority (usually 18 or 21, depending on your state and the account type).

The adult on the account—called the custodian—makes all deposits, withdrawals, and decisions about the money. The child's Social Security number goes on the account, and the money legally belongs to the child, but the custodian has full access and control. This is different from a joint account where both people can act independently.

Custodial accounts are common for saving money for a child's future, receiving gifts from relatives, or managing child support or inheritance payments. Some families also use them to teach children about money as they grow older.

Key Takeaways

  • A parent or legal guardian must open and manage a custodial checking account on behalf of a one-year-old, using the child's Social Security number.
  • Most banks allow custodial accounts, but features vary—some offer no monthly fees for children's accounts, while others charge standard checking fees.
  • You will need the child's Social Security number, a government-issued ID for the custodian, and proof of address to open the account.
  • The custodian controls the account until the child reaches age 18 or 21 (depending on state law and account type), at which point the child may take over.
  • Some banks offer custodial savings accounts instead of checking accounts for young children, which may have fewer fees and simpler features.

What You Need to Bring to Open the Account

Bring the child's Social Security number or a document showing it, such as a Social Security card or birth certificate. If you do not have the number yet, you can request one from the Social Security Administration before opening the account, or some banks will let you open the account and add the number later.

Bring a government-issued photo ID for yourself as the custodian—a driver's license, passport, or state ID card. You will also need proof of address, which can be a recent utility bill, lease, mortgage statement, or bank statement in your name.

Some banks ask for the child's birth certificate to verify the relationship and age. Call ahead to confirm what your bank requires, since requirements vary by institution.

Banks That Offer Custodial Checking Accounts

Most major banks and credit unions offer custodial accounts. Large national banks like Chase, Bank of America, Wells Fargo, and Citibank all have custodial checking options. Credit unions often have lower or no monthly fees for children's accounts, so it is worth checking what your local credit union offers.

Online banks like Ally, Charles Schwab, and Fidelity also offer custodial accounts, though some online-only banks have restrictions or do not offer checking for minors. Call or visit the bank's website to confirm they offer custodial checking before you go in.

Some banks market accounts specifically for children and teens with features like no overdraft fees, parental controls, or educational tools. These may be labeled "kids accounts," "teen accounts," or "youth accounts" rather than standard checking.

Fees and Features to Compare

Monthly maintenance fees for custodial accounts range from zero to $15 per month, depending on the bank. Some banks waive fees if you maintain a minimum balance (often $100 to $500) or set up direct deposit. Others charge no fees regardless of balance.

Check whether the account includes a debit card, since a one-year-old will not use one but you may want it for the future. Ask about overdraft protection and whether the bank charges overdraft fees—some banks do not allow overdrafts on children's accounts at all, which prevents fees but also means transactions can be declined.

Look at whether the bank offers online banking and mobile apps, since you will manage the account remotely. Some custodial accounts have limited online features compared to adult accounts.

Opening the Account in Person or Online

Most banks require you to open a custodial account in person at a branch, not online. Bring the documents listed above and plan for 20 to 30 minutes. The bank will verify your identity, confirm the child's information, and set up the account on the spot.

A few banks and credit unions allow you to start the process online and finish in a branch, or to complete the entire process by phone or mail. Check your bank's website or call to see what options are available before you visit.

Once the account is open, you will receive a confirmation, a debit card (if the account includes one), and online banking login information. The bank will mail these to your address on file.

What Happens When the Child Turns 18

When the child reaches the age of majority—18 in most states, 21 in a few—the custodial account automatically converts to a regular account in the child's name. The child then has full control and the custodian's authority ends. The bank will notify you of this change in advance.

Some banks require the young adult to visit a branch or confirm the conversion online. Others handle it automatically. The money in the account remains the child's; nothing is removed or transferred.

If you want to maintain some oversight or control after the child turns 18, you can discuss opening a joint account instead, but that requires the child's consent and is a separate decision from the custodial account.

Custodial Savings Accounts as an Alternative

If you are primarily saving money for the child rather than making frequent deposits and withdrawals, a custodial savings account may be simpler and cheaper than a checking account. Savings accounts typically have no monthly fees, no debit card, and no overdraft concerns.

Savings accounts earn interest on the balance, though rates are usually low (often under 1% annually). Checking accounts typically earn no interest. If you plan to deposit money and let it grow, a savings account is more efficient.

You can always open a savings account now and add a checking account later when the child is older and might need a debit card or more frequent transactions.

Frequently Asked Questions

Do I need the child's Social Security number before I open the account?

Most banks require it, but some will open the account without it and let you add the number within 30 days. If your one-year-old does not have a Social Security number yet, you can request one from the Social Security Administration online or by mail—it takes one to two weeks. Call your bank first to see if you can open the account while you wait.

Can I open a custodial account if I am not the parent?

Yes, if you are the legal guardian. Grandparents, aunts, uncles, or other relatives can open a custodial account if they have legal guardianship or the parent's written permission. Some banks require documentation of guardianship. If you do not have guardianship, the parent must open the account.

What happens to the money if I die before the child turns 18?

The money in the account belongs to the child and does not go through your estate. However, the account will need a new custodian to manage it until the child reaches 18. Name a successor custodian when you open the account, or update your will to specify who should take over. Talk to your bank about their process for changing custodians.

Can the child withdraw money from the account before age 18?

Only the custodian can withdraw money—the child cannot. This is one of the main features of a custodial account: it protects the money until the child is old enough to manage it. Once the child turns 18, they have full access.

Is there a limit to how much money I can put in a custodial account?

No limit on the account balance itself. However, large gifts to the account may have tax implications for you. Consult a tax professional if you plan to deposit more than a few thousand dollars per year, as there are annual gift tax rules that may apply.